There was a form tag in the Login.aspx. Pay attention to action="Default.aspx" (this was the problem)

<form id="form1" method="post" action="Default.aspx" runat="server">

This problem may occur if your page(in this case Login.aspx) andform action property(Default.aspx) are different.

Reason :

This occurs after installing SP1 for .NET 3.5 is because prior to this service pack, the action property was ignored. Now that it is no longer ignored.It will work properly. I mean, this is not a bug, it’s a feature...

Solution:

Remove the form-action property or change it to post correct page(in this case Login.aspx).